Please do not give solution in image format thanku During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows:Year 1Year 2$ 1,071,000$ 1,701,000Sales (@ $63 per unit)Cost of goods sold (@ $38 per unit)Gross marginSelling and administrative expenses*Net operating income646,000425,000301,000*$3 per unit variable; $250,000 fixed each year.The company's $38 unit product cost is computed as follows:Direct materialsDirect laborUnits producedUnits sold$ 124,00022,00017,0001,026,000Variable manufacturing overheadFixed manufacturing overhead ($264,000 ÷ 22,000 units)Absorption costing unit product costProduction and cost data for the first two years of operations are:Year 1Year 222,00027,000675,000331,000$ 344,000$ 1012412$38Required:1. Using variable costing, what is the unit product cost for both years?2. What is the variable costing net operating income in Year 1 and in Year 2?3. Reconcile the absorption costing and the variable costing net operating income figures for each year.

Under variable costing, ending and beginning inventory will be valued on the basis of variable cost…

During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 $ 1,071,000 $ 1,701,000 1,026,000 675,000 331,000 $ 344,000 Sales (@ $63 per unit) Cost of goods sold (@ $38 per unit) Gross margin Selling and administrative expenses* Net operating income *$3 per unit variable; $250,000 fixed each year. The company's $38 unit product cost is computed as follows: Direct materials Direct labor 646,000 425,000 301,000 $ 124,000 Variable manufacturing overhead Fixed manufacturing overhead ($264,000 ÷ 22,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced Units sold 22,000 17,000 22,000 27,000 $10 12 4 12 $38 Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net operating income in Year 1 and in Year 2? 3. Reconcile the absorption costing and the variable costing net operating income figures for each year.

During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 $ 1,071,000 $ 1,701,000 1,026,000 675,000 331,000 $ 344,000 Sales (@ $63 per unit) Cost of goods sold (@ $38 per unit) Gross margin Selling and administrative expenses* Net operating income *$3 per unit variable; $250,000 fixed each year. The company's $38 unit product cost is computed as follows: Direct materials Direct labor 646,000 425,000 301,000 $ 124,000 Variable manufacturing overhead Fixed manufacturing overhead ($264,000 ÷ 22,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced Units sold 22,000 17,000 22,000 27,000 $10 12 4 12 $38 Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net operating income in Year 1 and in Year 2? 3. Reconcile the absorption costing and the variable costing net operating income figures for each year.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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